January 8, 2012

It’s only money…

On January 8, 1835, for the first and only time in our history, the national debt was $0.00.

In other years there have been deficits, of course, but also surpluses, so just the once did everything balance.

Fort Knox - where they keep the real money.

We started with a big deficit after the Revolution – in fact, deficits always increase because of wars. The Civil War was pretty pricey – from $65 million in 1860 we went on to owe $2.7 billion by the end of the war. It took more than 50 years to bring that number down by half, just in time for WWI, which took us back up to $25 billion.

But boom times have usually followed wars; WWI was followed by eleven years of surpluses and the debt went down by over a third.

FDR spent lavishly during the depression and by the end of WWII, the debt had gone from $16 billion to $260 billion. But a boom kept things stable until Vietnam. At that point, the debt began to climb and has done so ever since.

Currently, we seem to be running about $14 trillion in debt, which is close to 100% of GDP. We did that after WWII, but not for long, thanks to the good times in the Fifties.

And at least ten other countries are well over that ratio – Japan for instance functions with debt that’s 197% of GDP. (Info on this comes from the CIA Factbook.)

However, those other countries include places like Zimbabwe, Greece, Italy and Iceland, so not much comfort there.

Since the numbers have become impossible to get your head around, it’s hard for most of us to worry about the national debt from day to day – but if you think about what could be done with the $430 billion we pay in interest, it begins to seem a little less irrelevant.

* * *

It’s Elvis Aaron Presley’s birthday today – he’d have been 77. Checking the data at Wikipedia, I discovered a new fact: Elvis was a twin. Sadly, his identical twin brother, who arrived 35 minutes earlier, was stillborn. If the clip below is any indication, the King knew from early on just how things would go – he’s about 21 here, only two years into his professional career:

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I had forgotten what a rich resource the CIA website is!! I spent half an hour reading the 1954 recommendation for what became the US U-2 spy plane overflights of the Soviet Union. The Cold War lives on in recently-declassified CIA documents from the era. Browsing through the CIA library is a history lesson from fascinating originating source material. Thanks for calling this site to my attention today!

So very interesting to get this long historical view of the ups and downs of our budget! I wouldn’t ever think of going to the CIA website. Thanks for doing it for me.
Also, you picked a very stirring moment in the Elvis career…it was actually beautiful! You did it again